Maersk, a Danish container shipping company, has announced that it will cease operations on Red Sea routes effective December 15, 2023. The company has released a forecast indicating that it is unlikely to resume operations on these routes before the end of 2024. The decision to stay off Red Sea routes is significant for the company as it is currently the second largest in the world in terms of container transportation volumes.
The area poses increased risks for shipping, with attacks occurring further from the coast, forcing ships to take longer detours when transporting goods between Asia and Europe. This has resulted in increased fuel costs, estimated to be 40% higher than December figures. Maersk has also had to rent an additional 125 thousand containers due to increased delivery times.
The German company Hapag Lloyd has also stated that it will not be returning to the Red Sea at this time. These decisions by two major shipping companies are likely to have a significant impact on global shipping routes and supply chains. The uncertainty surrounding the safety and efficiency of the Red Sea routes is likely to have a ripple effect on trade and commerce between Asia and Europe. It remains to be seen how other shipping companies will respond to these challenges and what solutions will be implemented to ensure the continuity of operations in this critical region.